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of higher education. Read the second installment on BI and enrollment management. Read the third installment on social media analytics in the classroom.

It may be uncomfortable to think of higher education as big business, but when it comes to survival and the bottom line, colleges and universities aren’t that different from retail, manufacturing or customer service. Higher education institutions have a product to sell and strive for ways to become more efficient, established and attractive to potential customers, in this case prospective students. For many colleges and universities, that has meant turning to business intelligence (BI) -- and, more specifically, predictive analytics tools -- for help.

The trend of implementing BI tools is growing beyond colleges and universities themselves to the foundations and organizations supporting higher education institutions. For the College Foundation of North Carolina (CFNC), a one-stop shop for students looking to advance into higher education, investing in BI and predictive analytics has been a game changer.

CFNC is composed of three partners: The College Foundation Inc. (CFI), a nonprofit organization founded in 1955, provides financial aid services to residents of North Carolina and today presides over a $3.3 billion loan portfolio. Many of the grants CFI manages are administered on behalf of a state agency called the North Carolina State Education Assistance Authority (NCSEAA). In return, CFI provides support -- including IT services -- to NCSEAA. Together, they are joined by a statewide initiative called Pathways of North Carolina.

As well as the three organizations work together, communication problems began surfacing just a few years back. At that time, the executive director of the NCSEAA was growing dissatisfied with CFI’s ability to produce reports quickly, especially when he needed to deliver information to the state legislature.

“The authority basically made it clear that it was not pleased with the speed and sometimes accuracy of reports, in particular around grants,” said Jim Avett, the president and CEO of CFI. “We could provide the reports, just not as timely as [the executive director] would have liked.”

Inquiries from legislators can run the gamut, Avett said, from generalities on the number of women or minorities receiving financial aid in any given year to specifics on how members of a particular district are utilizing financial aid services.

A local investmentCFI looked peripherally at several alternatives but ultimately invested in SAS Business Analytics Software.

“We approached them with our problems. They were supportive and gave us a lot of help on the front end,” Avett said. That help included expertise from Zencos, a SAS consulting firm hired by CFI to aid in the implementation of the system.

While it didn’t hurt that SAS is a local company with origins stemming from North Carolina State University, the decision for the purchase was mainly driven by necessity.

“We didn’t need another query package,” Avett said. That already existed with its New Generation Software, which CFI still uses heavily.

The SAS software also contains querying abilities, but Avett said comparing the two is like comparing apples and oranges.

CFI still uses New Generation, which runs on iSeries, for green-screen work and other tasks performed by the organization’s IT department. The SAS software, on the other hand, is more user-friendly, Avett said, enabling end users access to information that could help churn out reports quickly.

“We needed to be able to query, but that was not at the top of the list,” Avett said. “The analytics piece was the priority.”

In other words, it wasn’t speed and accuracy in report generation alone that compelled CFI to pursue business intelligence software. Avett said the organization wanted to explore “what if” scenarios as well, and it needed more than New Generation Software to do that efficiently.

Predictive analytics tools and financial aidThe investment in BI software and predictive tools, which Avett said happened several years ago, couldn’t have been timelier.

Like other states across the country, North Carolina is experiencing financial turbulence. Recently, the governor vetoed a proposed budget that could raise college tuition while reducing financial aid services, making higher education that much harder to afford, especially for low-income students.

In the past, financial aid estimates were just that -- estimates. Those estimates were guided by gut feeling rather than numbers, Avett said. When considering the Free Application for Federal Student Aid (FAFSA), CFI would interrogate the data and try to determine eligibility, reserving funding for the most expensive scenario -- even before a student declared intent.

“We would reserve dollars for students to make sure they’ll have the money to attend the most expensive school in the state that the student listed on their FAFSA,” he said.

While Avett recognized the danger in estimation, he said he is unaware of a time when promises made to students didn’t materialize. But even so, conservative estimates could also tie up a percentage of funding until later in the academic year. Now, the SAS software provides predictive analytics and more precision, allowing the organization to stretch financial aid services out to more students in a timely manner.

That kind of quick information dissemination can be a key for enrollment, especially among low-income students, Avett said.

“We’ve done an excellent job of getting the message out there that if you’re in high school, and you’re making the right grades, you’ll be able to attend even if you don’t currently have the assets to make that happen,” Avett said. “A big part of that is a better running of the grant system. When you apply for financial aid, you get the information back quickly letting you know that money is available.”

The other side of financial aid, Avett said, is loan repayment. CFI is working with forecasting tools to try and determine loans that will be repaid versus loans that won’t be repaid no matter what.

“We know, historically, that what we were looking for was in-depth information not all that different from what a credit approval might be,” he said. “That’s not easily discernable through our regular query package.”

Avett said CFI is capturing data on students, sifting through that data and trying to discern if any patterns exist that could help to predict nonpayment.

Having this kind of information could help to control the default rate. On federal loans, a high default rate can reportedly mean consequences for the state -- and any state in a similar situation, for that matter -- though the issue is mired in politics, with some saying fears of sanctions or reductions in aid are unwarranted.

Even today, as some of the state’s financial aid resources are depleted, legislators are relying on predictive analytics reports to help provide insight into how the consolidation of some state grants might impact students and universities before forging ahead with a decision.

While CFI originally planned to roll out the new BI software across the board -- from state grants to federal loans -- the federal government’s 2010 vote to issue loans directly rather than through third parties like CFI means that piece “has been put on hold,” Avett said.

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